EDPR
Wednesday, May 6th, 2026
03:30 pm Lisbon/UK time
Chaired by Miguel Stilwell d’ Andrade
Link for conference call replay: Here
Company Participants
• Miguel Stilwell d’Andrade, Chief Executive Officer
• Rui Teixeira, Chief Financial Officer
• Miguel Viana, Head of Investor Relations and ESG
Miguel Viana
Hello and welcome, everyone. Thank you for joining EDPR’s First Quarter 2026
Results Conference Call. We’re pleased to have with us today our CEO, Miguel
Stilwell d’Andrade, and our CFO, Rui Teixeira.
They will walk us through the key financial highlights of the period and share insights
into our strategy.
After the presentation, we will open the floor for questions. You are welcome to submit
them via the conference chat or ask them directly over the phone. The session is
scheduled to last approximately 60 minutes.
With that, I will now hand it over to Miguel Stilwell d’Andrade to begin the
presentation.
Miguel Stilwell d’Andrade
Thank you, Miguel. Good afternoon, everyone. Thank you very much for attending our
First Quarter 2026 results’ call.
Let me start with the key operational and financial highlights of these first 3 months.
And so if we move straight into slide four, I'd say that EDPR's first quarter was a good
solid start to the year. We were absolutely focused on executing everything that's
under our control, and making sure that this is then reflected in the underlying
performance. I think we are well set up for having a constructive base for the rest of
the year. On the key financials, recurring EBITDA reached EUR489 million, up +2%
YoY, or 10% when excluding Forex. Recurring net profit of €71m, increasing 9% YoY,
or 21% when excluding Forex.
This strong financial performance was supported by key operational drivers: we
delivered +2.0 GW of gross capacity additions over the last 12 months. We also have
over 90% of 2026 target additions already installed or under construction.
Transcript – 1Q26 Results Conference Call
Generation was up 0.4 TWh to 11.3 TWh. However, we had lower prices in Europe,
with average selling price down 9% to €52/MWh versus last year. We also had a
strong impact of the US Dollar devaluation versus first quarter last year.
On the current macro context, it is particularly important to recall that over 80% of our
generation is long term contracted or hedged.
We benefited from our continued focus on operational efficiency, resulting in a 11%
YoY decrease of the Recurring Core OPEX and good improvement of the productivity
metrics OPEX/MW and OPEX/Gross profit.
So overall, I think very proud of the work that the team has done over the last few
years. It's consistent in terms of extracting efficiencies and making sure we can
leverage the economies of scale within the company.
Finally, over 90% of our recurring EBITDA is in A-rated countries reflecting low risk
earnings. So I just wanted to reiterate that also in terms of the quality of the earnings.
If we move to Slide 5, we'll talk a little bit about the US Market. I think here, it's key to
note that independent consultants are projecting, like Wood Mackenzie and others,
are projecting that between the electrification trends, industrial reshoring, and the
rapid growth of data centers, they are driving sustained increase in electricity
demand of around 2% to 3% a year between 2025 and 2035.
I think it's also increasingly clear that renewables generation will play a pivotal role in
supporting this, and it's expected to have an 8% tagger between 2025 and 2030,
while non-renewables declined by 4% given that many thermal plants are being
retired. So obviously, some are being installed, others retired, the older ones retired,
net decline. So renewables is really outperforming the more conventional thermal.
The bulk of the capacity additions by technology are mostly solar and storage, and
still some wind.
And if we look at the graph on the right-hand side, we can see that in 2025, roughly
60 gigawatts of new generation capacity was added in the US., with around 92%
coming from wind, solar, and storage. Solar alone accounted for more than half of the
total additions, and this trend is expected to strengthen even further. So overall, a
structural shift in the US Energy mix and underpinning EDPR's long-term growth
opportunities, given our focus on renewables.
I also wanted to give you just two important data points. In the month of March,
renewables, including hydro, generated over one-third of US Electricity generation,
overtaking gas for the first time ever. And also that additions in the US Are expected
to reach a record high of 86 gigawatts this year. So I think just two important data
points are really the highlight of what I just mentioned.
If we move to Slide 6. So obviously, this demand is then translating into a favorable
price environment. And the graph, as you can see on the left-hand side, shows the
evolution of the market PPA prices. They've risen steadily across the different
technologies, and this is then reflected in very robust contracting activities.
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So we have corporate PPA volumes reaching around 24 gigawatts. in 2025. EDPR
has secured already 1.4 gigawatts in the US Over the last nine months since the OBBB
was signed, and we expect to continue some momentum over the next few months
and still sign an additional couple of PPAs, which are currently under active
negotiation. We're benefiting from growing demand for co-located generation
between solar and batteries and co-located demand solutions with data centers.We
have around 2 gigawatts of powered land, and so we continue to work on those
opportunities.
Also on the wind side, there are some attractive wind life extension and repowering
opportunities. We have around 0.6 gigawatts in marketing stage. However, this
optionality is not included in our 2026-2028 business plan, and so it would be an
upside if it materialized either in this period or post-2028.
I think this is relevant in the context of some of the recent news that has come up
about the licensing of wind.
If we move to Slide 7, I'm talking a little bit about Europe. So, here the message is also
very clear. I mean, on our side, we are very focused on value creation and discipline
on the investments.
But this is clearly a market where renewals are structurally supported by reinforced
electrification and energy independence efforts. And, you've seen a lot of statements
by President Ursula von der Leyen of the European Commission. You've seen them
by Dan Jorgensen, the European Commissioner of Energy. Sort of this focus on really
making sure we are more Europe is more energy independent and immune to some
of this volatility.
So, you can see this also just by the fact that as renewable penetration continues to
rise in certain markets like Iberia, we see a clear structural decoupling between the
electricity prices and fossil fuel price volatility. In general, it has lower and more stable
wholesale power prices. And I think this reinforces the role of clean generation, not
just in the decarbonization, but also in terms of system resilience and affordability.
So, Iberia I think is a good case study for the rest of Europe and I know that a lot of the
European political leaders have been looking at this precisely for that reason.
This transition is also being supported by regulatory and policy environments. I mean,
in 2025, close to 95% of all new capacity additions in Europe came from either wind,
solar, and storage. And for the first time ever, renewables overtook fossil fuels and
total electricity generation. So, again, we are well positioned to capture value here.
We have close to 15 gigawatts of pipeline in the European core markets and we
benefit from these fundamentals and increasing system needs.
Finally, around 55% of our European EBITDA comes from Iberia. And here, I think
regulatory risk, price volatility remains low and generation taxes have also recently
been reduced in Portugal and Spain. I know there's been some very recent
speculation about extraordinary taxes on energy. I think that if we look back in the
case of Portugal, certainly to the 2022 crisis, the electricity sector was not included.
So, we only know obviously what's publicly available, but I'd say that given that
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they're using as a precedent the 2022 basis that the electricity sector would be
excluded from that, but that's certainly a strong expectation. So overall in Europe,
supportive market context, strong pipeline visibility, disciplined capital allocation, I
think we see Europe as a good, stable and attractive platform for EDPR to continue
growing.
If we move to Slide 8, and talking about additions and the investment plan for 2026.
So on around one and a half gigawatts of target additions, we already have 90%, as
I mentioned, already installed or under construction to be delivered mainly over the
second half of 2026. A lot of this will be very much backloaded towards the end of
the year. We still have some remaining projects that aren't with the other 10%, which
are basically solar DG, which have an average of six months construction time. So,
we're still perfectly on time to have them built by the end of the year.
And overall US And Europe should represent around 95% of total expected additions
for the year. In terms of technology, around 50% solar, 25% storage, and 25% wind
onshore and offshore. As I said earlier, 2026 plan really shows this focus on core low
risk markets, US And Europe representing 90% of total investment, 95% coming
from A-rated countries.
If we move forward to Slide 9, I'm talking about business plan execution.
2026, as I mentioned, secured, 80% of 2027 is already secured, and we have good
visibility of line of sight of additional megawatts coming out of the US Over the next
couple of months that we expect will be signed. So overall we have around 60% of
the five gigawatts additions already secured at this time, of which 3.2 gigawatts is
coming from North America and Europe already. I wanted to stress again, because I
really think that's an important part of our value proposition.
These are value creative, low risk growth with an expected return or spread IRR–
WACC for around 285 basis points.
To capture the benefits of this development activity, we are well positioned with the
pipeline and commercial momentum, as I mentioned, in US., Europe, and also some
low risk APAC markets.
We have around one gigawatts of PPAs on the commercial discussions, 20
gigawatts of pipeline overall, 50% of this located in MISO and PJM some of you who
are more familiar with the US, might know these are some of the most attractive
demand pockets of products in the US And this is being supported by competitive
domestic content procurement. As you know, we reconfigured our procurement
supply chain a couple of years ago, so it's all domestic content. And we also have the
tax credit safe harbor.
In Europe, we have around 0.8 gigawatts of PPAs on the commercial discussions and
the 15 gigawatts pipeline in the core European growth markets. Again, deliberately
low-risk, execution-driven, focusing on core markets, leveraging CfD auction routes
to market. In APAC, we are focused very much on countries like Australia, Singapore,
and Japan, A-rated countries with also good growth prospects.
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So takeaway, very simply, is delivery of the 26-28 business plan is being de-risked
at attractive returns with long-term contracting.
To move to Slide 10, and just before I pass over to Rui, so an important point is the
focus on portfolio optimization. And we aim to maximize returns and to reduce risk
also through our asset rotation program and the disposals in non-core markets and
segments. In 2026, I think I say this every year, we continue to see strong demand in
private markets willing to buy high-quality assets at competitive multiples.
And this has been consistent over the last couple of years. Given the favorable
market environment, given the visibility that we already have, we are able to advance
with an upward revision on the expected 2026 asset rotation gains from around
EUR0.2 billion to a range of EUR0.2 billion to 0.3 billion interval. I think this is just an
additional proof of our strong execution track record and on a part which is critical for
our strategy. This is not done with additional volumes. In fact, if anything, we will
probably be doing less volumes than expected, but with higher gains per megawatt,
which I think is exactly the right message and the signal. And if you want, I think an
additional proof of the quality of the vintage of projects that are coming through this
year.
Additionally, our disposals in non-core markets is also ongoing, and we will be
reinforcing the high weight of A-rated countries in our portfolio. So, as I say, US and
Europe and certain select APAC countries.
Finally, just on offshore, I just wanted to highlight the recent settlement between
Ocean Winds and the US Department of the Interior that came out just a couple of
days ago. This will enable Ocean Winds to recover the leases in the value of around
$0.2 billion. This is in line with the current book value of these projects, so we don't
expect gains or losses on these projects. But obviously, it will be a positive cash
impact on the balance sheet that we expect to have over the next couple of months.
This will reduce EDPR’s current exposure to the US Offshore to a book value of $0.2
billion. So we're roughly recovering already half of the value. And if you want, we can
then talk a little bit later about South Coast wind. But I'll stop here, and I'll pass it over
to Rui, and come back later for final remarks.
Thanks.
Rui Teixeira
Thank you, Miguel. Good afternoon to you all. So let's move now to the first quarter
2026 results.
We are delivering a solid start of the year. Average assault capacity increasing 9%
year-on-year. We reached 20.5 gigawatts by the end of the quarter. Obviously
driven by North America and Europe as the regions we've made additions.
At the same time, we also continue to actively reshape the portfolio with the different
destinations that were closed throughout last year. Some final closing also in the first
quarter this year. So that was about 0.9 gigawatt sold in line with what was
forecasted in the business plan. As a result, electricity generation increased 3%
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year-on-year to 11.3 terawatt hours. This is obviously supported by average higher
assault capacity in operation, partially offset by the perimeter change, as I just
mentioned, given the asset rotation. Overall, generation levels are fully in line with our
full year expectations.
So if we move now to revenues on Slide 13, electricity sales decreased 5% year-onyear to EUR591 million. And this reflects both lower prices in Europe, sort of a
normalization of the prices in Europe, and the depreciation of the US Dollar. I think it's
important when we exclude FX, revenues were broadly stable and the higher
volumes offsetting the price normalization.
The average selling price declined to EUR52.3 per megawatt hour. As I said, mainly
to the European case, that was a drop of about 14% year-on-year. But North
America, if you look at it from a US Dollar perspective, actually remained stable yearon-year.
Europe was impacted by this normalization, obviously despite the higher generation,
particularly in Iberia, given the extreme weather events that happened in this first part
of the year. North America declined EUR24 million year-on-year, but actually
increased in US Dollar, again, supported by the volumes. South America and APAC
showed positive contributions from higher volumes as well.
So overall, I think the key takeaway is that volumes are growing, pricing reflects
normalization, and then we have the specific original events and particularly the FX
impact on the US Dollar side.
If we now move to Slide 14, I think it's important to focus on efficiency because this is
really a key part of how we create value. So, in the first quarter, our recurring core
OpEx decreased by 11% year-on-year, and even when accounting for FX and
depreciation and inflation adjustment, it actually decreased 9% year-on-year. So
it's a very important decrease in terms of the recurring core OpEx. This reflects a
continued execution in what we define as the efficiency strategy.
On a per megawatt basis, core OPEX is decreasing by 11% over the last two years to
EUR41,000 per average megawatt, and OpEx per gross profit ratio improved to 34%.
These results reflect obviously the focus on more efficient, flexible O&M strategy,
continued cost discipline, organization streamlining with a lean workforce model, but
also scaling digital and AI across EDPR that is contributing to productivity
improvements across the different regions. So all this in the context of growth,
bearing in mind that EDPR delivers its growth targets and is able to reduce the core
OpEx. So I think it's notable, it's a remarkable achievement by the entire company.
As we also recently shared, this is part of a wider value-driven asset management
that namely will look at how we maximize the asset's life, can think about life
extension, we can think about repowering, co-location, something that we
highlighted a few weeks back, which is the value, the existing value of the operating
fleet that goes well beyond what is the sort of defined standard useful life for the
asset, particularly on the wind side.
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Transcript – 1Q26 Results Conference Call
So now if we move to Slide 15 on EBITDA, returning EBITDA reached EUR480 million,
up 2% versus last year, or actually increasing by 10% if we exclude the effects
impact. Looking at the main drivers, electricity sales were low, as discussed. Tax
equity revenues increased by EUR13 million, supported by the solar additions that
benefit from the ITC that offset the gradual phase-out of the wind PTCs.
Core OpEx decreased by EUR20 million, just mentioned before, reflecting these
efficiency gains, the cost discipline. Other costs improved, including initial asset
rotation gains of about EUR5 million in Q1, so from the final closing from a past
transaction in Greece. As also Miguel stated, we should observe the concentration of
these years' asset rotation gains in these coming quarters.
From a regional perspective, growth was mainly driven by North America, while
Europe was impacted by the price normalization, and just finally portfolio expansion
in the efficiency gains definitely more than offsetting this this pricing effect that I just
referred to.
On financial results, Q1 saw an improvement of EUR13 million year-on-year with total
cost total financial costs reaching EUR113 million. This is driven by EUR0.4 billion
lower average net debt also by a reduction of the average cost of debt from 4.8% to
4.5%. We also observed a lower impact from FX in derivatives and these were partly
offset by higher capitalized financial expenses.
The financial profile remains strong 74% of the debt is fixed. We are well diversified
across different currencies 42% Euro 39% US Dollar 9% in Brazilian Real and 11% in
other currencies. We maintain the long maturity profile with 60% of our debt
occurring beyond 2028. So all these reinforces the discipline and low-risk financial
policy that we have.
So we are now moving to Slide 17 and looking to the cash flow evolution in the first
quarter of 2026. Organic cash flow reached EUR142 million 1% up versus last year
reflecting the strength in the from the operating portfolio. During the quarter we
invested EUR0.4 billion in expansion CapEx partially funded by operating cash flow
and as a result net debt increased to EUR8.4 billion that's up EUR0.3 billion since
December.
On the net profit recurring net profit this is on Slide 18 reached EUR71 million
increasing 9% year-on-year or 21% when excluding forex. It showcases how EDPR's
good financial operational performance was in this first period of the year.
The main drivers in addition to the portfolio expansion the good operational
performance that deliver higher EBITDA also the improved financial results
depreciation slightly increased obviously given the capacity additions tax remained
broadly stable when compared to the first quarter last year there are no material
asset rotation deals that were closed in this period in both of the years and also higher
minorities following the completion in Q4 last year of the sale of a 49% stake in our
pioneer portfolio in the US.
Regarding the one-off impact at the net profit level there's EUR1 million recognized
this year mainly coming from accelerated depreciation of middle four. As you may
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remember, this is a repowering wind farm project in the US. And we also have some
small impacts from some restructure internal restructure (HR restructure). Before
ending just a quick note on script dividends following the approval in our last month's
shareholders meeting and the launch of the process on May 4. The admission to
trading of the new shares will start on June 3.
Just finally, before I head over to Miguel, let me just, on Slide 19, let me just recall the
sensitivity of EDPR's net profit to wholesale markets. And obviously considering the
current context, the geopolitical context, current market context, and the wholesale
markets. So first of all, the portfolio is highly resilient, it has a low risk profile. 85% of
the generation is either long-term contracted or hedged.
Around 70% is secured through long-term contracts with an average remaining life
of approximately 11 years. Therefore, we have very strong visibility on the cash flows
well beyond the current business plan. The remaining exposure is actively managed
through rolling hedges, while merchant exposure remains limited and there are
always various trade management. So, as a result, the average selling price are, I
would say, very well protected.
It's around €51–53/MWh in 2026, and then increasing to €52–55/MWh in 2028.
Again, importantly, it's a very limited merchant exposure and well diversified
geographically, which then benefits from this diversification effect. So in Europe,
foreign prices for 2028 are currently slightly below our business plan assumptions.
This is mostly driven by Iberia with a modest negative impact of around 2% on any
income.
But on the other hand, this is largely offset by more favorable dynamics in US.,
particularly in our exposure to PJM and NYISO markets, but also Brazil, where
forward prices are above the plan assumptions and therefore they contribute
positively to the earnings.
So overall, as I was mentioning, there's a diversification effect that works also as a
hedging across the different regions. Taking all this into consideration, net income
sensitivity to forward power prices as of now is less than 1% for 2028.
So again, I think it reinforces the message that our earnings are predictable to the
extent of the exposure to wholesale prices and therefore also the cash generation. So
with this, I would hand over to Miguel for closing remarks.
Miguel Stilwell d'Andrade
Thank you. Thanks, Rui.
So just before going to closing remarks, just a quick update on how we see the 2026
EBITDA guidance. So we had a good first quarter operational and financial
execution. And so we feel comfortable about upgrading our 2026 EBITDA guidance
by 5% to around EUR2.2 billion, essentially on the back of three levers. The first one
is an improved outlook on the asset rotation gain.
So as I say, going from around EUR0.2 billion to a range of EUR0.2 billion to EUR0.3
billion, and benefiting from the strong private markets and investors willing to buy
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these high quality assets. As I say, I think this is a signal of a new vintage of projects
coming through that we'll see over the coming years, months and years. The second
lever was really a strong focus on the underlying performance and this commitment
to driving efficiency consistently over time across the business. You saw the numbers
that both I and Rui talked about in terms of bringing the OpEx down and bringing the
OpEx per megawatt down.
And I think that's something that, again, this is something we're going to continue to
drive over time. And I think it's really showing through also in the numbers. Finally, the
third point, third lever, it's really just the improved macro context. So power prices,
some tailwinds on the regulatory and political landscapes, like the generation tax in
Spain, which is also positive.
So all of this put together, I think just shows EDPR is in a good place, strong execution
capabilities, both financially and operationally, together with a good environment.
And I think that we can really get the company to unlock its full potential over the
coming years. With that, going on to just the final slide. So just the key data points.
Execution on the business plan, progressing well, visibility continuing to improve.
60% of the 5 gigawatts already secured at attractive risk return metrics. Financial
momentum remains strong, over two gigawatts under active discussions in the US
And also 0.8 gigawatts in Europe. 80% of our electricity generation long-term
contracted.
I think Rui has already spoken at length about that and how that keeps us sort of
protected from some of the volatility. Post-2028, I think the visibility is also
strengthening. And so maybe at some point we'll be able to also talk about that.
Demand growth in both Iberia and the US., structurally driven by these long-term
electrification trends, data centers, electrical vehicles, industrial reshoring. I think this
is really important because more demand means you need more supply. And so we're
definitely locked into that.
In the US., higher PPA prices, meaningful recontacting upside, improving local supply
chains, safe harbor framework for tax credits locked in. I think all positive. Europe,
increasing demand for hybrid solutions, regulated TFT schemes, reinforcing this role
of renewables. So I think Europe also a lot of positive signals.
So overall, I think we are in a good place. Continued investments in digital and
artificial intelligence. I think that's what we're also continuing to focus on to just push
this operational efficiency and the asset performance. And so all in all, taken together,
good long-term demand fundamentals, good medium-term visibility, disciplined
execution means we are confident on EDPR's ability to grow and have resilient value
creation, not just over the course of this business plan, but also beyond.
Thanks. And Miguel, I'll pass it back to you.
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Questions And Answers
Q- Miguel Viana
And the first question comes, essentially we have from Beatriz from Mediabanca and
other analysts around the EBTA guidance for 2026. If we can elaborate on 2026
guidance upgrade from EUR2.1 billion to EUR2.2 billion, namely providing detail on
the breakdown of contribution between asset rotation and underlying, and also
regarding how we see the evolution for the next quarters.
A - Miguel Stilwell d’Andrade
Okay. So essentially the upgrade is based on two things, on underlying performance
and also higher visibility on the asset rotation.
In terms of the underlying performance, so already 90% of our 2026 is long-term
contracted or hedged, so no reason for big deviations here. But excluding the dollar
headwind, I mean, the underlying effects would obviously be better. But even
independently of that, we have and are still expecting high single-digit growth of
electricity generation, so around 44 terawatt hours in
2026, and then an average selling price range to stay in the 51 to 53 years per
megawatt hour. Also expecting some slightly better contributions from pricing in
Poland, Romania, Brazil, better than expected OpEx, lower taxes and levies in Liberia,
US Partially offsetting US Depreciation.
So that's on the underlying performance. On the asset rotation, as I said I think in the
presentation, we are expecting to sell the same or I would say slightly lower perimeter
of assets, almost certainly, but at better margins than initially assumed. And so higher
visibility on asset rotation also. So the combination of this I think is what's giving us
confidence on the upgrade.
Q- Miguel Viana
Thank you, Miguel. The next question comes also from our participant, from Morgan
Stanley. If we can provide some visibility in terms of guidance for net profit for 2026
that we didn't provide in the presentation.
A - Miguel Stilwell d’Andrade
So normally we don't give a lot of or we don't give specific guidance on net profit for
EDPR I think what I can say here is that we're comfortable with the recurring net profit
consensus for 2026, which depending on the sources could be between EUR400
million and EUR450 million range.
And I say, as I said, , this is due to what I mentioned, what I said about the EBITDA
obviously then flows down to, to the net profit. We are also working on EDPR's
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portfolio optimization. And so the exit of some non-core markets and business
segments.
And we expect that to also positively impact EDPR's underlying financials, the net
profit trajectory for the next couple of years. But in relation to 2026, essentially, some
of the comments on the EBITDA flowing down to the bottom line, let's say consensus
for '26, that range we're comfortable with.
Q- Miguel Viana
And we have a question also on the net debt by DRN, how do we see net debt
evolution until December 2026?
A – Rui Teixeira
Thank you, Miguel. So we do expect net debt below December '25.
Just reminded, it was EUR8.1 billion. And we should be deleveraging and trend down
as projected in the business plan '26-'28. Again, just reminded, we are expecting '28
to be below 2025 by EUR1.5 billion. This obviously depends on the timing of the
execution and the cash-in on the asset rotation and tax equity proceeds, as well as
on the disposals, portfolio optimization, which are on track.
Q- Miguel Viana
Then we have a question on the recent news that came out this weekend on the
Trump administration blocking green power licenses that came in Financial Times. If
we have any comment on this?
A - Miguel Stilwell d’Andrade
Sure. So, yeah, I mean, there was news, I think we all saw that on the US.,
administration blocking wind power licenses.
I think it's a broader concern for all wind powering projects that require federal
permits primarily. And it's obviously something that we're monitoring very closely
together with the industry associations, ACP and others that are acting on the
ground. I think this is I just wanted to reinforce this because I mentioned it also way
back in November at the capital markets, and I've repeated it several times. We don't
expect this to have any impact on the '26-'28 business plan because we already
projected this to be relatively prudent in that respect.
So, we're not, we are only including one repowering project in the US., for this period.
That's already under construction. So, any additional repowering that we did in this
business plan period would be a potential upside.
So, this news is not obviously positive, but it doesn't have an impact on our
projections. For the period immediately post-2028, and we highlighted this also in a
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recent presentation we did in Madrid for some of you that were able to attend, the
Wind Value Levers, we have around 0.6 gigawatts of repowering projects currently
in the marketing stage But as I say, we are being deliberately low risk in terms of
permitting and PPA commitments. And only projects that meet these criteria are
considered secure. So, we're not taking undue risks on this. And as I say, any news
that you get on the repowering in principle would be upside for us.
Q- Miguel Viana
Still on US., also in terms of clarification of the Ocean Winds US Offshore Settlement
Agreement and namely related with the reinvestments, financial impact for EDPR,
and also how do we see the standing of the south coast wind that is still in the portfolio
OW?
A – Rui Teixeira
Thank you, Miguel.
So, just first to clarify, the reinvestment, so maybe just step back.
And as you may remember, these two projects, one in New York and one in California,
those are projects where Ocean Winds partners with two other investors, SGIP in
New York and CIPB in California. What is agreed is that these investments will be
carried out by our partners in those two projects. And therefore, there will be no direct
involvement of Ocean Winds or EDPR in those investments. I would say that the most
relevant impact that we are foreseeing for EDPR is an expected reduction of 2026
net debt in the same amount of the reimbursement, obviously, in what is EDPR's
share.
Just also highlighting about three quarters of this reimbursement, the $0.2 billion, is
Blue Point. So, the New York and about one quarter is the Golden State Wind, which
is the California. So, that's not evenly splitted between the two projects. From 2027
onwards, we see sort of a single-digit impact in terms of the barriers associated with
the earnings, given that we are saving those interests.
Regarding South Coast Wind, I mean, that's probably the most advanced project,
offshore project, right now in that part of the country in Massachusetts. It's very
advanced in terms of the permitting interconnection milestones. So, all options are
being explored. For the moment, the project continues to be harbornated.
As you may remember also, we assumed that as a -- we took that view back in the
end of 2024, when we also booked an impairment for a year delay in the project. But
as I said, I mean, all options are being explored as of now.
Q- Miguel Viana
Regarding data centers, just a question around the strategy of EDPR and how it's
evolving our pipeline in the US And Europe.
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A - Miguel Stilwell d’Andrade
So, this is an interesting area, but what I'd say is we're what I'd say is we're working on
both sides of the Atlantic in Europe, mostly here in Iberia, and also in the US., on
several opportunities for co-location, powered land, securing electricity
consumption, grid connection rights. We have some more advanced stages of
powered land in the US And Spain, and we'll let you know, obviously, when we reach
a concrete deal. So I don't want to elaborate too much on this. At this point, I would
say, once we have something concrete, we'll obviously communicate it.
The only thing, perhaps, to mention here, and this is something that we've also
mentioned in presentations, is we have around two gigawatts of powered land
pipeline, of which 0.8 gigawatts is an advanced permitting, and so we are continuing
to explore different ways of monetizing this and extracting value. Maybe just by, as a
side note, but obviously relevant to us, just recently in Iberia, Start Campus, which
was one of the big danger centers here in Portugal, which was being built, just
recently announced second phase with NVIDIA, Nenskill, and that's obviously a key
milestone. So they're already moving through into the second phase, and I think we'll
be well positioned to also then start marketing the third phase, and this is already
represents, or begins to represent, a significant amount of additional demand here in
Portugal, which will come through sort of 2027 and beyond. But I think it's one specific
example, just because it's come out very recently, that I wanted to flag.
I mean, there are many more that we could probably talk about.
Q- Miguel Viana
Regarding the upgrades of 2026 guidance, the question is if this guidance
upgrade has any implication on EDPR 2026-2028 targets of the business plan?
A - Miguel Stilwell d’Andrade
Well, I'd say that it's still early, so I'm not going to comment too much. We're focused
on delivering the plan and also gaining further visibility on the post-2028 period, so
that hopefully at some point in the not-too-distant future, we can come back and talk
about that. What I'd say is that the portfolio optimization is evolving positively,
underlying net profit in 2027-2028, when we look at sort of prices, and we're still
assuming after rotation gains contributing around EUR0.2 billion, sort of in line with
the business plan assumptions that we had.
We're also seeing good commercial activity in the US And Europe for 2027-2028
and beyond. We're also seeing that optionality that I talked about, the data centers
and some other levers for either collocation or repowering. So, there are some
potential upsides that we're working on, but for now, I'd say, let's just assume the
current estimate for 2028. and as I said, if we get there's no visibility on '28 and
beyond, then we would come back to the market and talk about that.
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Transcript – 1Q26 Results Conference Call
Q- Miguel Viana
We have a last written question before moving to the questions on the phone from
Arthur Sitbon from Morgan Stanley. We have seen multiple companies in the sector
using equity in recent weeks to prepare future growth opportunities. Are there
scenarios in which EDPR could consider resorting to the same type of measure?
A - Miguel Stilwell d’Andrade
Yes, so I think what I'd say here is that we are very comfortable with our current plan
in terms of balance sheet. We obviously use asset rotation as a way of optimizing our
balance sheet.
Our plan does not assume any equity raise, and we don't need to raise any equity. But
I think we are just very focused on creating the maximum amount of value possible.
So delivering on the megawatts execution, both securing additional megawatts,
delivering on those megawatts,
rotating those megawatts with significant gains, and keeping the balance sheets
within the ratios that we want and that are compatible with the triple B rating for EDP.
So that's what I'd say. We don't have any plans for equity raising.
Miguel Viana
Thank you. So we go now to the questions on the phone. First question comes from
the line of Pedro Alves from CaixaBank. Pedro, please go ahead.
Q- Pedro Alves
Hi. Good afternoon. Thank you for taking my question. Two, if I may, the first one, and
I'm sorry to come again to the 2028 targets.
You have more than 60% of all divisions secured for the plan, and apparently with
better return encouraging origination activity. You mentioned the optionality from
repowering in the US In marketing states, and also that visibility on assets rotation
has improved with a healthy private market for M&A. So can you at least
acknowledge that your 2028 targets now look to be, seem to be on the conservative
side, at least in terms of underlying EBITDA? And the second question is just
additional color on the PPA pricing in the US And the cost inflation. The PPA prices
continue to go up quarter after quarter, and I think this is already reflected in better
IRR over walk spread compared to your original plan assumptions. So I just wanted to
ask if your latest commercial discussions with offtakers in this environment give you
confidence on keeping this expansion of IRR spreads for the whole five gigawatts of
the plan, or if eventually higher EPC interconnection or equipment costs could be
absorbing most of this PPA upside into the returns.
Thank you.
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Transcript – 1Q26 Results Conference Call
A - Miguel Stilwell d’Andrade
Thanks. Listen, we're only six months into the plan, so we announced this in November,
just May, and I think what we look for is to go on executing over the course of this year,
and then as I said towards the beginning of next year or something, once we have
good visibility in '26, we can maybe come back and talk a bit more about '28 and
beyond. But what I'd say is that there are positives and negatives on the 28 numbers
in general.
I think we'll feel very confident about 2028, but you were trying to get me to
characterize it as conservative, and I don't think I'd go there. I would use that at this
point. So we're six months into the three-year plan. Let's give it a little bit more time
before we talk about changes to 2028.
PPA pricing: I mean, yes, we feel very comfortable on the spread. I think the structural
underlying demand growth, both in Europe and in the US., means that we feel
confident that new generation needs to be well remunerated, and we're not going for
volume.
We're going for risk-adjusted returns, and we want to make sure that we keep this
criteria and are very disciplined on that. I think we are comfortable on those spreads.
As you know, we have, let's say, a number of megawatts that we're expecting for the
next couple of years, which seems quite doable, and so we're going to make sure we're
focused on getting the best projects possible precisely to keep those spreads and that
low-risk profile, which I think is extremely important. On the supply chain and all that,
I mean, we're constantly updating.
One of the things I think we've gotten much better over time is our operational
management on the supply chain, just making sure we're always building in better
estimates about CapEx costs, building in more contingencies, buffers, making sure
we're much closer in terms of when we take investment decisions and when we
actually also lock in the CapEx. So that's what I mean when I also talk about low risk,
just making sure we are not exposing ourselves to inflation or to any type of cost
overruns.
Q- Pedro Alves
Thank you.
Miguel Viana
Thank you, Pedro.
Next question comes from Javier Garrido from JP Morgan. Javier, please go ahead.
Q- Javier Garrido
Thanks, Miguel.
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Transcript – 1Q26 Results Conference Call
All my questions have been answered, but I would like to ask again on the last topic,
you could elaborate a bit more on the potential risk or the way you manage the risk
from inflationary pressures, given what's going on in the Middle East and the likely
inflationary pressures we should see in the value chain, it would be helpful if you can
elaborate a bit more on how protected you are, whether your protection comes from
risk-sharing with the PPA of takers, or because it's more about fixing the price.
Basically, what is different from 21-22?
A - Miguel Stilwell d’Andrade
Thank you. I think that's happy to go into more detail on that. I think the big, so the way
that this works in terms of development of these projects, as you know, is you go on
doing some of the development, and at the same time, you are trying to find an
offtaker or PPA and trying to price the project and running in parallel sort of an
estimate for the CapEx for the project.
It's not always easy to line these up. And I think one of the things that the sector did in
general, not just ourselves, but would be to make sure that we were able to lock in a
PPA with certain CapEx estimates and then go and try to lock the CapEx once you
have the PPA closed. That meant that you were exposed for a certain amount of time
between the PPA, between when you locked in the PPA with certain estimates, and
when you actually locked in the CapEx. And what we've been very focused on doing
is reducing, to the maximum possible, any time between when you lock in the PPA
and when you lock in the CapEx, and making sure that you're not taking on exposure,
let's say inflation exposure or CapEx exposure, between these two dates, when you
take FID and close the PPA, and when you lock in the CapEx. So, that's one point.
I think the second point is just to say that we're also building in much more buffers and
contingencies for delays, for unexpected contingencies that might come along. And
so, we're being more prudent also in terms of the CapEx numbers that we use in our
own modelling. So, when we talk about some of these spreads, they already have
built in not just what we're seeing in the market, but we're adding in an extra buffer
just to be on the safe side.
So, that's why I think we feel quite comfortable about, or much more comfortable
about managing, I think, the supply chain, just based on everything we've done
internally to adjust, to reduce the risk.
Q – Alberto Gandolfi
I have the following questions. The first one is, I think, just wanting to go back to slide
nine. Can you please tell us again, what is the IRR over WACC spread? And if you can,
the absolute IRR you have been signing, let's say, over the past six to nine months.
And how much is the uncontracted CapEx to '28.
Because I'm just trying to figure out the upside from the plan you presented, which
appears, at this stage, fairly conservative.
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Transcript – 1Q26 Results Conference Call
The second question is, could you be a bit more explicit on any potential data center
strategy you may have? There are companies now that are actually developing data
centers themselves. There are companies that are selling sites, companies providing
energy like yourselves. Are you tempted to also explore the other two routes? Are you
working on that, like a site and/or direct development?
And the last question is, I understand you just said you're comfortable with the current
capital structure, but can I ask you, when can you upgrade the current level of net
capacity additions without having to raise any equity? Is it given the returns, is it later
in '28, is it '29, '2030? So can you tell us when can we expect you to grow a little bit
more? Because on a net basis, you're not adding that much given the size of the
company right now.
Thank you.
A – Miguel Stilwell d’Andrade
So quite a lot to unpack there. So let’s see if I can get all of your questions. On the first
one, in terms of spread, obviously it depends on the geography because it's really
spread to the underlying WACC so I won't give you very specific IRRs. But let's say in
the US it could be around 10%, thereabouts. I think we've seen projects sort of
high nines, that sort of range. But the overall spread then in Europe, it will be slightly
lower IRRs because the cost of capital is also slightly lower.
In terms of a contracted 2028 CapEx, I mean, we still have around 40% given that
we only have 3.2 gigawatts secured of the 5. So, just doing the math, the 1.8
gigawatts still unsecured is basically mostly 2028, a little bit of 2027. So hopefully
that answers the first question.
On the second question, on the Data Center strategy, we will not do direct
development of Data Centers. I don't think we have the competencies or the balance
sheets to get into that.
And I don't think we're the best player for that. I think I believe very much in sticking to
what we know how to do and stick to the basics, if you want. And what we know how
to do is to develop renewable projects, run networks, well, in the case of EDPR, just
projects, whether it's wind, solar, batteries, we know how to develop sites, we know
how to develop interconnections, we have some good sites that we can monetize,
as I say, either by helping co-locate data centers, for example, close to existing
sites that we might have. That's one way.
We can also see co-develop with other people as well new sites, or come up with sites
that we think are attractive for some of these data centers. So, that's also something
that we can do.
Then, obviously, the plain vanilla, selling energy to these big tech or some of these
offtakers. That's our bread and butter.
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Transcript – 1Q26 Results Conference Call
That's what we do on a day-to-day. That's what we've been, I think,
very successful. EDPR, I think, is a leader in doing that. That's going to be the bulk
of our projects going forward.
So, direct development, no. Selling directly power to these sites and these PPAs and
doing these projects, yes - that's our bread and butter. Additional monetization of
existing sites and our development of some new sites, we will also look at that and are
looking at that. If we have concrete transactions, we'll let you know.
On the third question, capital structure. I mean, we've been around this a while. I think
what I say is that the two things go in parallel. As you know, for 2028, we still
have some space on
the balance sheets.
We are expecting
that
we
could potentially upsize there, just without having to sell additional megawatts. But
in any case, we can also manage these two. Since the market for asset rotation is so
healthy, we believe that we would be able to continue to upsize and continue to
monetize some of these projects.
So, it wouldn't require equity. So, I think that we've managed to find this balance
certainly over the last couple of years. That's what's built into our business plan so
that we could still keep the asset rotation.
Q – Manuel Palomo
Hello. Good afternoon, everyone. Two big ones.
One, maybe insisting a little bit in the last question, following up on it. If I look at your
first ten slides today in the presentation, it seems to be crystal clear the good
momentum for renewables. So, my question is, what prevents you from accelerating
the installation's pace? Permitting, balance sheet, lack of pipeline in certain
markets? So, that is my question. What is preventing you from that?
And the second one is a more detailed question on the Spanish generation tax. Could
you please quantify the impact, positive, I understand, from the removal of the
Spanish generation tax in 2026 numbers. Thank you.
A – Miguel Stilwell d’Andrade
Hey. Thanks, Manuel. So on the first one, what prevents us from accelerating? I don't
think anything is preventing us from accelerating. I think what we're making sure,
well, two parts to this.
One, making sure we really get the best project risk return. And so obviously we can
do more megawatts, but then you start perhaps sacrificing either returns or taking on
more risk. And so I think we continue to try to find the right balance in terms of volume,
but also risk return. As I say, it's very easy to build megawatts if you accept very low
returns because you'll just start getting market share, but we're not in the business of
building megawatts for the sake of it, in the business of making money. And so very
focused on getting that balance right.
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Transcript – 1Q26 Results Conference Call
The second thing though, is that there are obviously also restrictions on permitting
and licensing. I mean, that does slow down in certain markets. So for example, some
of the European markets in particular, whether it's Italy or France, places like that, that
there are restrictions in terms of building more megawatts. And in the US, in some
cases, particularly on the wind side, I wouldn't say so much on the solar and battery
side, but on the wind side, I mean, we just talked about some of the restrictions on the
repowering or upsizing some of the projects. So yes, there, there is a restriction. It's
not just a question of risk returns. It's a question of licensing and what you can
actually get there.
So within those restrictions, it's then choosing the best project to take forward.
On the second point on the impact of the generation tax, I think we're assuming
around EUR16 million at the EBITDA level, in terms of positive impact.
Closing Remarks
Miguel Stilwell d’Andrade
Thank you all for being on the call, we're off to a good start to the year. I think generally
positive outlook, that's why we feel comfortable in coming back to you with an
upgrade in the guidance, but I would say the long-term fundamentals are feeling very
good, whether it's on the demand side, which is obviously then going to drive on the
generation side.
On Manuel’s final question – what is keeping us from accelerating? – Obviously
there are still issues on the permitting and licensing, which can be frustrating to a
certain extent, but then within that, it's really just the question of making sure we're
choosing the best projects. And I think that's showing through. The reason we are
upgrading, for example, on the asset rotation gains even though we will probably be
doing less volume, is precisely because I think we are getting a good vintage of
projects coming through. And we've talked about this in the past that there was, let's
say, a less good vintage.
Now we're getting a good vintage, and I think that will show up. And it's just a
testament, I think, to the value of the project that we're building, not just the ones that
we're selling, but the ones that we're also keeping on the balance sheet going
forward. So off to a good start, looking good for the next couple of years, and we'll
come back to you in the next couple of months with some additional news. Thanks.
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